Businesses, mobile money transactions pick up after tax cut

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KAMPALA- Business appears to be picking up again at different mobile money transaction points weeks after the tax on withdrawals dropped from 1 percent to 0.5 percent.

Cyclone Times  has visited different mobile money points in Kampala and has established that transactions have risen after the telecom companies put into effect the amended Excise Duty Act.

The amendment saw mobile money tax charges drop from 1 percent that was provided for when the tax provision was created in July, covering all transactions including depositing, transferring and withdrawing money on one’s mobile money account. With the changes, only 0.5 percent is charged on withdrawals.

Asiimwe Raymond, a mobile money agent at Wandegaya in Kampala now reveals that the move has seen his customers rise compared to the days the 1 percent was being charged.

He says since November 17, the number is increasing ranging from 20 to 50 a day, compared the previous days he would get less than 15 clients.

The latest adjustments to the tax took effect on November 17 when all major telephone companies that offer mobile money service informed their clients.

Pauline Atugonza, a retail shop owner and a mobile money user based in Kisugu, Kampala, told Cyclone Times that the tax is fair enough for both the citizens and the government compared to the previous 1 percent. She said: “0.5 percent is good, I don’t find it a big deal to pay tax of 500 shillings in the 100,000 withdrawn.”

It should be remembered that on the 30th of May 2018, Parliament passed the Excise Duty Amendment Act which forced 1 percent excise duty on mobile money transactions.

This saw a number of clients shun transactions due to the charges and according to statistics from the Bank of Uganda, transactions reduced by 672 billion shillings in the first two weeks of July 2

 

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